A continuing care retirement community in Dearborn, MI, filed for Chapter 11 bankruptcy last week, triggered in part by payments due to settle a 2014 class action lawsuit as well as struggling financial challenges related to the COVID-19 pandemic.
The nonprofit Henry Ford Village has approximately $50 million outstanding municipal bond debt, reported assets of $50 million to $100 million and liabilities of $100 million to $500 million, according to a filing in the U.S. Bankruptcy Court for the Eastern District of Michigan. Oct. 22, the 1,038-bed community was ordered to pay $800,000, or 20% of its available cash, within seven days to settle a class action lawsuit from parties seeking repayment of their refundable entrance fees, according to an article Friday in Bloomberg Law.
“We have been in ongoing discussions about the need for a financial reorganization due to our stretched financial situation, industrywide challenges and impact from the COVID-19 pandemic,” Henry Ford Village Executive Director Bruce Blalock said in a press release. “This financial restructuring will allow us to achieve our goals while continuing to serve our residents with the highest level of service and care, and continuing to provide the resources, support and amenities they have come to enjoy and rely on while keeping COVID-19 safety protocols.”
A sale process “is the current anticipated plan” for restructuring under Chapter 11, Henry Ford Village’s attorney, Sheryl L. Toby of Dykema Gossett PLLC, said at the CCRC’s first-day hearing Friday.
